Innovation Activities and Competitiveness: Empirical Evidence on the Behaviour of Firms in the New EU Member States and Candidate Countries
AbstractThis paper aims to explore the factors influencing the ability of firms to compete in globalised markets. The Austrian and evolutionary economics and the endogeneous growth literature highlight the role of innovation activities in enabling firms to compete more effectively - and expand their market share. On the basis of these theories, and using a large panel of firms from several Central and East European Countries (CEECs), this paper attempts to identify the factors and forces which determine the ability of firms to compete in conditions of transition. The competitiveness of firms, measured by their market share, is postulated to depend on indicators of firms' innovation behaviour such as improvements in cost-efficiency, labour productivity and investment in new machinery and equipment as well as characteristics of firms and their environment such as location, experience, technological intensity of their industries and the intensity of competition. To control for the dynamic nature of competitiveness and the potential endogeneity of its determinants, and to distinguish between short and long run effects of firm behaviour, a dynamic panel methodology is employed. The results indicate that the competitiveness of firms in transition economies is enhanced with improvements in their cost efficiency, productivity of labour, investment and their previous business experience while stronger competition has a negative impact on it.
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Bibliographic InfoPaper provided by CASE-Center for Social and Economic Research in its series CASE Network Studies and Analyses with number 424.
Length: 54 Pages
Date of creation: Apr 2011
Date of revision:
competitiveness; restructuring; transition economies; market share; dynamic panel analysis;
Find related papers by JEL classification:
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-07 (All new papers)
- NEP-BEC-2011-05-07 (Business Economics)
- NEP-COM-2011-05-07 (Industrial Competition)
- NEP-CSE-2011-05-07 (Economics of Strategic Management)
- NEP-EFF-2011-05-07 (Efficiency & Productivity)
- NEP-EUR-2011-05-07 (Microeconomic European Issues)
- NEP-HME-2011-05-07 (Heterodox Microeconomics)
- NEP-INO-2011-05-07 (Innovation)
- NEP-KNM-2011-05-07 (Knowledge Management & Knowledge Economy)
- NEP-TID-2011-05-07 (Technology & Industrial Dynamics)
- NEP-TRA-2011-05-07 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kurt A. Hafner, 2013.
"Agglomeration economies and clustering -- evidence from German and European firms,"
Taylor & Francis Journals, vol. 45(20), pages 2938-2953, July.
- Hafner, Kurt A., 2008. "Agglomeration economies and clustering: Evidence from German firms," Center for European, Governance and Economic Development Research Discussion Papers 72, University of Goettingen, Department of Economics.
- Kurt A. Hafner, 2008. "Agglomeration Economies and Clustering – Evidence from German Firms," DEGIT Conference Papers c013_023, DEGIT, Dynamics, Economic Growth, and International Trade.
- Lau, Chi Keung Marco & Suvankulov, Farrukh & Karabag, Solmaz Filiz, 2012. "Determinants of firm competitiveness: case of the Turkish textile and apparel industry," MPRA Paper 46974, University Library of Munich, Germany.
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